Returns under Goods and Services Tax (GST)

CMA Arun S. Karnik

Section 27 of the draft model GST laws prescribes requirements as to filing of Returns under the GST regime.

Every Taxable Person (TP) is required to file monthly Returns, as applicable. All Returns under GST are to be filed electronically. If there are no transactions in a given period, the TP must file a ‘Nil’ Return.

The prescribed Returns under GST are as under :-

i. GSTR1- Details of Supplies during the month- to be filed by the 10th of the month following.

ii. GSTR2- Details of Purchases during the month- to be filed by the 15th of the month following.

iii. GSTR3-Final Monthly Return- to be filed by the 20th of the month following.

These are perhaps the three Returns which will have most significance in the business routines pertaining to availment of Input Tax Credit and payment of Net GST liability for the month.

iv. GSTR4-Return by Compounding Tax Payers- to be filed quarterly by the 18th of the month following a quarter.

v. GSTR5- Return to be filed by foreigners- to be filed within 7 days after expiry of registration.

vi. GSTR6- Return by Input Service Distributors- to be filed by the 13th of the month following.

vii. GSTR8- Annual return to be filed by the 31st December of the following financial year by every registered taxable person, other than Input Service Distributor, a deductotr of tax under S. 37, a casual taxable person and a non- resident taxable person.

As mentioned earlier, GSTR1, GSTR2 and GSTR3 are the three Returns which will have to be filed every month to
ensure smooth operations of business. Let’s understand the actual working of the routines involved.

The entire operation of the GST will be through the GST Network (GSTN). GSTN is a S. 25 company formed for the purpose of providing the IT infrastructure for working of the GST. Every Taxable Person (TP) will have to upload his GSTR1 Return, which is invoice wise details of the supplies of goods and services made during the month. This Return has to be filed by the TP by the 10th of the following month.

The GSTN system will generate GSTR2 Returns (details of purchases) for each TP capturing the data from the GSTR1 Returns uploaded in the system by the counter party suppliers. Each TP will thus receive an auto populated GSTR2 Return on his computer screen. The TPs have to review the auto populated GSTR2 Return and get the differences, if any, reconciled with the counter party supplier. TP can amend the contents of the auto populated GSTR2 to give effect to corrections/omissions and upload his GSTR2 Return by the 15th of the month following.

TP will then prepare his GSTR3 Return declaring the Output tax liability on supplies made during the month, Input Tax Credit availed and net tax liability. TP has to pay electronically his net tax liability and thereafter upload his GSTR3 Return. Payment of net tax liability and uploading of GSTR3 has to be completed by the 20th of the month following. GSTR3 Return will ,however be not regarded valid unless the net tax liability is paid by the TP.

GSTN is expected to provide the facility for real time uploading of supply invoices throughout the month. That is, the TPs need not wait till the end of the month for uploading their Supply invoices. Invoices thus uploaded can be corrected before the GSTR1 is uploaded by the TP. The details of invoices thus uploaded by the Supplier on real time basis can be viewed by the counter party Receiver. Thus the process of reconciliation between Suppliers and Receivers will be an ongoing process, so that discrepancies between the GSTR1 of the Supplier and GSTR2 of the Receiver are eliminated.

(Author can be reached at arunskarnik@gmail.com)

We would like to thank CMA Harshad Deshpande, who is also the Chief Editor of WIRC Bulletin, ICAI, for his effort to make the content on GST available to larger section of people and for dissemination of knowledge on the topic , which is of prime importance  not only for the taxpayers but also for common man of the Country.

Article been published with permission from CMA Harshad Deshpande given on behalf of Western India Regional Council of India of The Institute of Cost Accountants of India.

Source- WIRC Bulletin Diwali Special Edition on GST

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